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Insights Daily Current Events, 12 January 2016

Insights Daily Current Events, 12 January 2016


Paper 2 Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Fillip to ‘Make in India’ in defence purchases

The government has approved major changes to the Defence Procurement Procedure (DPP). Approval in this regard was recently given by the Defence Acquisition Council (DAC) chaired by Defence Minister Manohar Parrikar.

  • This is an attempt to streamline defence acquisitions and give a big impetus to indigenisation through the ‘Make in India’ initiative.


  • The DPP 2016 will have a new category, Indigenously Designed, Developed and Manufactured (IDDM) platforms, which will be the priority route for procurements. Within this two sub-categories have been created, one with mandatory 40% domestic content for a domestic design and the other mandating 60% local content if the design is not Indian. The domestic companies eligible under this will have majority Indian control and operated by Indian nationals.
  • In addition to building a technology base in the country, the government through the Department of Defence Production will fund private R&D for which various norms have been stipulated.
  • In another significant change, the contentious issue of offsets has been amended from the current Rs. 300 crore to Rs. 2000 crore giving flexibility for foreign companies. Offset clause mandates that a foreign company should invest 30% of the contract value back into the country with a view to bring in technology. Offsets push up cost of contracts by 14-18%.
  • According to the new changes, the definition to be counted as an ‘Indian company’ is a company that is controlled and operated by Indian nationals.
  • The DPP also sets up an empowered committee to solve disputes or unforeseen issues. Till now disputes went to DAC.
  • Each of the three Services will have a Major General-rank officer for project management to be run on road map in line with the long-term perspective plan.
  • Given the limited choices in defence equipment technology production, the DPP says bids can be accepted even if there is only one supplier.

About DAC:

The DAC, set up in 2001 as part of the post-Kargil reforms in defence sector, approves the long-term integrated perspective plan for the forces, accords acceptance of necessity (AON) to begin acquisition proposals, and has to grant its approval to all major deals through all their important phases. It also has the power to approve any deviations in an acquisition, and recommends all big purchases for approval of the Cabinet committee on security.

sources: the hindu, pib.


Paper 3 Topic: Environment.

No more ‘droughts’ in India, says IMD

The India Meteorological Department has changed the languages used in weather forecasting so that the civil administration gets a more realistic sense of the upcoming weather events.


  • The communication gap was particularly visible during the Uttarakhand flood in 2013 when the state administration failed to anticipate the severity of the disaster from the IMD warning, which used the outdated language.
  • Subsequently, a committee was set up to review the terminology and to determine how each of these terms can be defined based on supporting observational data.
  • At the end of the exercise, IMD now has better expressions to describe extreme weather events, which would also alert the administration on the need to take precautionary measures.

Important recommendations made by the committee:

The committee has suggested a host of changes that included stopping use of the term drought and making changes to terms used to describe rainfall categories based on its intensity. The India Meteorological Department (IMD) will now stop use of the term ‘drought‘ to describe poor rainfall recorded across parts of the country and replace it with the terms ‘deficient year‘ and ‘large deficient year‘.

The committee has also suggested new terminology for rainfall, snowfall, heat wave, cold wave and city as well as tourist spot specific weather forecast for short, medium and long term.

Following are the key terms that have now been standardized by the IMD:

  • Heat wave: Temperatures greater than 4.5 degree Celsius above what’s usual for the region.
  • Cold wave: Temperatures less than 4.5 degree Celsius above what’s usual for the region.
  • Severe heat wave: greater than or equal to 47 degree Celsius.
  • Severe cold wave: Minimum temperature is 2 degree Celsius or lower.

The new criteria classify all-India rainfall into five categories: normal (plus or minus 10% of the long period average) below normal (rainfall lower than 10% below average), above normal (rainfall greater than 10% above average), deficient year (rainfall deficit between 10 and 20% up to 40% of India’s spatial area) and large deficient year (rainfall deficit of over 10% across more than 40% of India’s area).

The rules also change criteria to classify seasonal rainfall. Instead of the old four rainfall categories (excess, normal, deficient, and scanty), the IMD has introduced six categorieslarge excess: 60% and above; excess: between 20% and 59%; normal: minus 19% to plus 19%; deficient: minus 20% to minus 59%; large deficient: below 60%; and no rain: (0).

sources: the hindu.


Paper 3 Topic: Infra-railways.

PMO sets up panel to fast-track bullet trains

The Prime Minister’s Office has constituted a committee under Arvind Panagariya, vice-chairman of the NITI Aayog, to hasten the Mumbai-Ahmedabad High-Speed Rail Corridor, meant for bullet trains between the two cities.

  • The panel will interact with the Japanese counterpart for taking the next step in implementation. The Railway Board chairman, secretary in the department of expenditure, foreign secretary and secretary (industrial policy) will be part of the panel.


  • The Cabinet had recently given its nod to set up India’s first 500-km-long bullet train project, with the help of Japanese funds and technology. Connecting Mumbai to Ahmedabad, the cost of the project will be Rs 98,000 crore. Japan will invest Rs 78, 000 crore. This is the largest foreign investment in India’s railway sector.
  • The Cabinet’s approval for the high-speed line was based on the recommendations of a committee headed by Panagariya. The Panagariya panel had favoured Japan over China due to the low-cost funding up to 80% of the cost proposed by Japan International Cooperation Agency, at a 0.1% interest rate (50-year repayment), apart from a commitment for technology transfer and local manufacturing for a specified period.
  • It had suggested Indian Railways run the corridor for an initial five years, after which private operators could be allowed.

sources: bs.


Paper 2 Topic: Bilateral agreements.

India-Australia Social Security Agreement Comes Into Operation

A new social security agreement signed between India and Australia has come into operation enabling people of both nations to avail retirement benefits in each other’s country. This pact is likely to boost bilateral business linkages.

  • The Agreement was signed in November 2014.


  • This agreement will give people more freedom to move between Australia and India. Australian residents living in India will be able to claim the Australian Age Pension without having to return to Australia, while Indian residents living in Australia will have access to Indian retirement pensions.
  • As a result of this agreement, temporarily seconded workers, and their employers, will only have to make compulsory contributions into their home country’s superannuation or pension system rather than both countries’ systems.
  • This is expected to save Australian businesses operating in India about Rs. 66 crore (USD 10 million) per year, and put Australian businesses on an equal footing with their competitors from other countries that already have similar agreements with India.

Australia now has 30 international social security agreements around the world to support people living and working in more than one country, including with countries like Austria, Belgium, Canada, Japan, Korea, Spain, Switzerland and the US.

sources: bs.